The tax on winnings is one of the types of taxation that is applied to funds received in the course of participation in gambling-lottery, casino or betting operations. In the land segment, different rates are applied in relation to the country’s residents and tourists. Of course, countries that have abandoned this type of taxation are more attractive from the point of view of tourists.
Jurisdictions that use this type of taxation, explain this by the fact that the gain is perceived as additional income of the citizen.
Taxes on winnings in the United Kingdom
Despite the strictness of British laws regarding gambling, there is no tax on winnings in online casinos in the country. Operators are obliged to pay a tax rate of 15% of gross income.
The specificity of the United States is that each state has the right to determine its policy in relation to the gambling industry. Despite the fact that in most of them the organization of online casinos is illegal, it is becoming increasingly common to legalize sports betting. In some states online bookmakers are allowed to operate, or even a mobile app for betting. The most stringent rules in respect of such winnings are in Pennsylvania. The tax rate for residents is 30%.
Users can become involuntary taxpayers. This is possible under the condition of excessive tax burden imposed on the operator, when the latter gradually increases the cost of its own services.
The activities of international operators of online gambling are prohibited in Australia, respectively only licensees of the market have the right to organize the work of online casinos. The latter ones pay a tax rate of 15% of GGR. At the same time, users are not burdened with tax obligations.
Latin and Central American countries
Online casino activity is legalized in Mexico and Argentina. Operators are licensed by local gambling regulators. Mexican operators are obliged to pay a tax of 30% to the state treasury. In addition, there is a tax on winnings, which is paid by both the operator and the player. From gambling companies the state charges 12%, and the winner remains to pay only 6%.
Income tax in Argentina is 41.5%. At the same time, if the user wins a cash prize exceeding 1200 pesos (€48), he undertakes to pay 31% to the state.
It is illegal not only to organize the work of online casinos, but also to participate in them in South Africa. The only legitimate online operators are betting companies.
Corporate income tax in the country is set at 29%. Players who have successfully participated in online betting operations are obliged to “share” with the state. The fee will be 15% of the prize.
By the way, the tax on winnings is planned to be introduced in land-based gambling establishments of Japanese casino resorts.